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US guidelines threaten hot new cholesterol drugs

Abu Dhabi, November 15, 2013

New US guidelines on heart health that favour potent statins may threaten future use, or even approval, of a hot new class of experimental cholesterol drugs called PCSK9 inhibitors that have been billed as potential blockbuster treatments, said analysts.

But use of Merck & Co's widely prescribed Zetia, which is not a statin, and Vytorin, a related drug, will likely not be badly hurt anytime soon, analysts said, because doctors will need time to understand and accept the new guidelines.

The Merck drugs have combined annual sales of more than $4 billion, or 10 per cent of overall company revenue.

"I read the new guidelines as a negative for any drugs that aren't statins, including PCSK9 inhibitors," said Jon LeCroy, an analyst with MKM Partners.

The guidelines, issued by two leading US medical organizations on Tuesday, recommend strong measures for patients at particularly high risk of heart attack or stroke, including use of more potent statins, although not the addition of other types of medicines that have not proven their worth.

In fact, statins are the only class of cholesterol-lowering medicines that the guidelines recommend for patients who can tolerate them.

The guidelines dropped an emphasis on specific targets for lowering LDL levels. Instead, they suggest that individual patient risk of developing heart disease rather than an LDL number should be used to determine the need for more intensive treatment.

Even though Zetia has been on the market since 2002, Merck has not yet proven it reduces heart attack risk and stroke. A costly "outcomes trial" that has been under way for years is expected to answer that question by the second half of 2014.

"I don't think sales of Zetia and Vytorin will fall away rapidly," said Atlantic Equities analyst Richard Purkiss. He said most doctors will wait for the Zetia trial results before abandoning the drug and Vytorin, which pairs Zetia with the generic form of Merck's statin Zocor (simvastatin).

LeCroy expects insurers to eventually put up bigger barriers to use of Zetia and Vytorin because of the guidelines, in favor of cheaper generic statins. "But it will probably take another year before the Merck drugs feel it."

A number of other non-statin cholesterol drugs could eventually also be hurt by the guidelines, analysts said. They include AbbVie Inc's Niaspan, which raises "good" HDL cholesterol, AbbVie's Trilipix, used to cut blood fats called triglycerides, and Amarin Corp's recently approved Vascepa prescription fish oil product.

"You need to take a hard look at how much benefit we get from those drugs. If we can't show that adding drugs to the statin makes a difference, than we have to think twice before doing it," Dr. Neil Stone, chairman of the panel that wrote the new guidelines, said in a telephone interview.

Statins, such as AstraZeneca Plc's Crestor and generic forms of Pfizer Inc's similarly potent Lipitor (atorvastatin), are the most widely used cholesterol treatments and work by blocking the liver's production of "bad" LDL cholesterol. Zetia instead works by curbing absorption of cholesterol by the intestines.

If the outcomes trial definitively shows that Zetia cuts the risk of heart attack and stroke, Stone said, "then that will have to be taken into account. Guidelines exist to be updated."

Pfizer, Amgen Inc and a partnership of Regeneron Inc and French drugmaker Sanofi SA are racing to develop the PCSK9 inhibitors, all deemed by Wall Street capable of generating annual sales in the billions of dollars.

The injectable drugs have generated excitement in mid-stage trials by slashing levels of LDL cholesterol 60 per cent beyond reductions achieved with statins alone, without a pattern of serious side effects.

The companies are now conducting late-stage trials of the drugs, which work by blocking a protein called PCSK9, whose natural function is to maintain the presence of LDL in the bloodstream.

The drugmakers are hoping the US Food and Drug Administration will approve their PCSK9 inhibitors on the basis of their ability to lower LDL. In the meantime, they are conducting their own outcomes studies to eventually prove to regulators that their medicines actually lower the risk of heart attack and stroke.

Mark Schoenebaum, an analyst with ISI Group, said the new heart-protection guidelines "appear to raise the bar for cholesterol-lowering drugs" that are not statins. He said use of Amgen's PCSK9 inhibitor, called AMG 145 or evolocumab, if it is approved, could be slowed until data from the drug's outcomes trial arrives in late 2017 or early 2018.

Moreover, Schoenebaum said it remains to be seen whether the new guidelines, formulated by the American Heart Association and the American College of Cardiology, will affect the willingness of U.S. and European regulators to approve the new class of cholesterol fighters.

"These new drugs may be very helpful in getting cholesterol under control, but we're setting the bar high," said Stone. "We're saying show us that in addition to lowering cholesterol that you reduce the risk of heart attack and stroke."

Schoenebaum said Wall Street has been expecting the Amgen drug to generate sales of $1.1 billion in 2018. For now, he said he is sticking to his own sales forecast of $500 million that year and more than $1.4 billion in 2020.

"Given the (heart) guidelines, we remain comfortable with our estimates for now but will monitor how the guidelines are perceived by the wider medical community," Schoenebaum said in a research note.

Analysts said sales of Crestor were unlikely to get a big boost from the new guidelines because most doctors would reach instead for less costly generic Lipitor.

Shares of Regeneron fell 3.4 per cent, those of Amgen rose 0.7 per cent and Amarin was unchanged, all on the Nasdaq. Pfizer rose 1.6 per cent, Merck dropped 0.5 per cent and AbbVie gained 0.8 per cent, all on the New York Stock Exchange. Sanofi fell 0.8 per cent in Paris, and AstraZeneca shares slipped 0.5 per cent in London.-Reuters